2015 – A Profitable Year for Norwegian

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Europe’s third-largest low-cost carrier, Norwegian reached a total revenue of 22.5 BNOK (£1.8bn) in 2015 – an increase of 15 per cent. The production growth (ASK) increased by 5 per cent, which illustrates a breather in the company’s expansion, explained by phasing out older aircraft whilst adding new aircraft to the fleet. The load factor remained high at 86 per cent in 2015, up 5 percentage points from the year before. Norwegian carried close to 26 million passengers in 2015, an increase of 7 per cent from 2014.

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Not only did unit revenue grow, driven by a sharp increase in passenger load factor, but also unit cost fell. Pre-tax result improved by £137 or 1.7 billion Norwegian krones (NOK) over 2014.

The company reports a net profit of £6 million (75 MNOK). The figure was heavily influenced by an unrealized loss on fuel hedging for 2016 and 2017, which makes up 800 MNOK. Adjusted for such unrealized hedging, the 2015 pre-tax result was £70 million (875 MNOK). This was a strong improvement compared to -1.168 MNOK the previous year.

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However, chief executive Bjørn Kjos warned that plans to introduce a passenger tax in Norway is creating an “uncertain situation. It is a paradox that the company with the lowest emissions seems to be punished the hardest.”

Norwegian operates 20 bases worldwide and opens its first in Italy at Rome Fiumicino airport on March 27.

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The airline’s low-cost long-haul fleet of Boeing 787 Dreamliners, which operate transatlantic routes from Gatwick, is set to grow to 12 by the end of 2016.

Kjos said: “Norwegian is establishing and preparing for an organizational structure that will secure cost efficient international expansion and necessary traffic rights for the future.

Norwegian's long haul network 2014
Norwegian’s long haul network 2014

In February 2016, Norwegian reached an agreement with cabin crew in Norway and Denmark. The new collective agreements are for a two-year period and will secure a steady foundation for the coming years.

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We enter 2016 with favorable fuel costs and one of the youngest fleets in Europe, which presents a significant competitive advantage.”

2015 – A Profitable Year for Norwegian, written by Tor Kjolberg